Yellen stresses need for flexibility of Fed policy

WASHINGTON (AP) - Federal Reserve Chair Janet Yellen says the Fed must remain intent on adjusting its policy as needed to respond to unforeseen economic challenges.

In her first major speech on Fed policy, Yellen is seeking to explain the Fed's shifting guidance on its interest-rate policy, which at times has confused or jarred investors. She said the Fed's policies on interest rates "must respond to significant unexpected twist and turns the economy may make."

Yellen says the Fed has faced numerous challenges in its efforts to invigorate the economy's recovery from the Great Recession.

She says the Fed's forecast for moderate growth has changed little since last fall despite the severe winter. She says Fed officials still see only a gradual return to full employment over the next two to three years.